Run silent, run deep: the SL Marketplace and eroding merchant trust

Linden Lab depend on land tier (server space, call it what you will) for 80%(ish) of their revenue. This places them in an awkward position vis-à-vis providing any form of tier easement, even if they wanted to (as I’ve commented before).

The remaining 20% comes from the likes of Premium membership, and more particularly, the SL Marketplace (SLMP). In the case of the latter, the revenue doesn’t only come from the 5% commission on goods sold through the Marketplace, a lot of it comes via the listing enhancements merchants are encouraged to pay for. These theoretically boost sales by placing items in places such as the SLMP home page, or on the Checkout pages, and are paid for on a 30, 15, or 7-day rolling subscription basis, costing merchants between approximately $5.00 and $12.00 USD a month per item, with some merchants paying over $200 USD per month for enhancements.

Listing enhancements – can amount to a pretty penny in outlay per item

Earlier this year, the system went haywire, failing to take due subscriptions for around a two-week period (JIRA WEB-4638). It was finally resolved by Linden Lab taking a single, large payment from merchants’ accounts. While people had no issue in paying for services rendered, the problems here were that a) next to no forewarning was given that accounts were about to be so debited, leaving many merchants with a sudden and unexplained drop in their account balances; and b) many were billed in excess of the two weeks subscriptions actually owed (with some reporting being billed for up to four weeks); while c) the billing information received made it hard for merchants to actually determine which of their listing enhancements had been billed, or even if the right enhancements had been billed.

This understandably led to some confusion within the merchant’s forum, and not a little upset, particularly as some merchants had also been faced with an inability to cancel some of their listing enhancements due to an ongoing issue with many items remaining stuck in a “locked” mode, preventing them from being edited – a situation itself which at the time was some 18 months old (and is now some two years old, and still awaiting resolution – see WEB-2974).

While merchants were refunded for any overcharging on their account as a result of the billing issue, the manner in which the situation was handled by LL resulted in something of a drop in trust where the Marketplace is concerned, and a number of merchants publicly indicated they would be ceasing in their use of enhanced listings.

At the end of July, the problem started again, and was raised as a topic for discussion in mid-August, as well as having a new JIRA (WEB-4927) raised against it. Neither the discussion thread nor the JIRA drew comment from the Commerce Team. Instead, a single payment was taken from all “at fault” accounts, again without any forewarning, and again with Merchants facing issues over what, precisely, they have been charged for, and whether those listings they have made payment against are actually active.

Failed subscriptions for August – courtesy Ry0ta Exonar

Again, the problem here is not so much that things Went Wrong and broke again – that’s pretty much taken to be the standard operating condition for the Marketplace nowadays – but how the Commerce Team managed the issue. Almost nothing was said on the matter (again), with the only communications forthcoming from the Commerce Team being a terse instruction not to re-open WEB-4638 after Ry0ta Exonar attempted to do so (hence WEB-4927), and a brief Marketplace dashboard message posted on September 28th, which simply said:

We are aware of some issues with Product Listing Enhancements. Keep an eye on the Grid Status page for more details.

With neither the dashboard message or Status page message actually stating what was about to be done.

So is it little wonder that merchants are again looking at listing enhancements with a jaundiced eye? Several have re-stated the fact that they will no longer participate in the process and others have stated they are terminating – either automatically or manually – their subscriptions. Given that LL are seeking to increase their non-tier related revenues, one would think that ensuring the one service which does so is run with a level of professionalism and communication that would not undermine customers’ faith in the service, or their willingness to place money into it.

Currently, and added to the rest of the ongoing litany of issues and problems with the Marketplace, this doesn’t appear to be the case.

LL really, really needs to hire someone to facilitate communication. Mostly that means sitting in on every meeting asking “why shouldn’t we explain this to the residents?”. They also need people who know how to communicate (both talk AND listen!).
An LL diplomatic corps?

The problem here is that the Commerce Team continues to appear to be a fiefdom run inside a fiefdom. Even were some form of communication channel provided, I have serious doubts as to whether they would participate, not without a sizable whip being cracked over them, at least.

Right now, wrt to general communications, as side elsewhere, I’d simply settle for an established outward flow of meaningful communications from the Lab which can be accessed without the need to sigh-up to several different external social media options, chasing after in-world user groups (or getting friends to attend and send me transcripts), rooting down through the forums and listening to hearsay.

Atm the only group you can get informations from is the community.. bloggers.. people who write in forums and so on. It sometimes feels so like LL did leave the field. That is truly sad and another company would have died already with such a bad communication, I am sure.

That actually bubbled up to the surface in one of the linked forum posts, as it is something that a number of people feel – hence my comment to Shug on fiefdoms. I first noticed it in 2009/10, but simply put it down to the way Pink Linden ran things. It seems to go a lot deeper than that, tho. Or maybe Pink did a bloody good job of erecting Chinese Walls around the Commerce Team, which have remained largely unbreached since her departure. But it is odd, however you look at it.

Welcome to the normal behavior of the LL Commerce Team. This is the behavior that the Marketplace merchants have had to deal with pretty much for most of Brooke Linden and her team’s generation of this team. They have gone BLACK OPS with their merchants since spring 2011. We rarely hear from them except for an extremely rare blog or forum post and only if one of the countless major issues in Marketplace has gone to a point that they are forced to communicate.

If you are not a Merchant on MP – you are not aware of the utter lack of respect this LL Commerce Team has for its direct customers – the Merchants. They do not listen to the features and fixes the merchants have countlessly begged for them to fix. They initiate secret development of features most did not want on MP and we often do not find out about it until they release it in an MP change. Many of the MP changes will have new and farther reaching bugs.

But it all stems around a team that has zero skills in communicating with its customers… zero Customer Relationship skills, and no understand on the unique needs of SL’s Marketplace merchants & customers.

SL Merchants could write a book of complaints agains this team but Rodvik has ignored all requests from Merchants to overhaul this team.

Oh, more than aware of the problems, Toy :). I may not be active in the Merchant’s forum, but I keep an eye on it, and follow matters & report on them as time allows. I do feel for all of you who are far more engaged and involved than I am in SL commerce. While vanity may play a part in it, I hope articles such as this prick consciences at the Lab. That and the fact, I agree on the communications front (which is a particular chestnut of mine).

Beyond the constant bugs & LL handling of Listing Enhancements (which BTW a lot of us Merchants have long since abandoned for being ineffective and far to costly for its benefit), look at this team addressing the Gaming of product ratings/reviews, Direct Delivery that still has bugs and its value was questionable and has left MagicBoxes still in play because of the bugs, missing merchant activity reports that were in xstreet and never return when MP was released, questionable listing search feature, etc. etc. etc.

I gave up when I realised I was paying the commission to get an unreliable delivery service that Linden Labs refused to take responsibility for.

I’ve sometimes thought that the TOS on some aspects of the Marketplace would be difficult to enforce in court, as they may contradict statute law. But who has the cash to pay a lawyer, and it’s all in California anyway. Maybe the answer is a new xstreet.

Slapt.me, Metaverse Exchange, Apez, etc; few have survived. While the reasons for them being unable to survive may not be directly related to their ability to encourage merchants to use them, it is fair to say that none enjoyed anywhere near the volume of use that XSL/SLX/SLMP has been able to enjoy, simply because users tend to stick more with using the Linden Lab offering as a “trusted” source, rather than looking elsewhere.

There’s also the fact that setting-up and running such a site takes a lot of time and effort. If you’re not running it as a full-time business, things can get in the way of providing a service of the standard you want to offer, and which people expect, in order for it to become at least self-sustaining (and preferably recoup the expense of setting it up, promoting it, and so on).

There are a whole raft of other issues that have to be dealt with as well, especially if a group comes together with the intention of setting something up, which could make stepping into the breach equivalent to stepping into a minefield.

Not saying it cannot be done. It might even be argued that the likes of Apez, Slapt.Me and Metaverse Exchange were ideas ahead of their time, and that conditions are right today for an alternative to SLMP to have a reasonable chance of succeeding. But it is still a big gamble, especially when starting from scratch.

Like as not, LL understood this well ahead of purchasing XSL – hence why they also bought-up OnRez and then folded it.

Yes there have been many valiant attempts – especially around the end of 2009 when Pink Linden and her minions deployed an utterly horrid “Freebies / Clutter Tax” roadmap that caused such a milestone Merchant backlash that 1000’s of Merchants either left xstreet all together or migrated / leveraged these alternative SL Content marketplaces.

I was one that was inspired to expand my selling of my SL content at 2 of these alternat MPs. I did NOT move away from xstreet at that time because as much as I hated where Pink & team were operating LL’s Xstreet, it would have been stupidity to leave the near monopoly player in the SL web marketplace. But I was one of the most vocal critics of the LL Commerce Team’s strategy and strong advocate to promote the visibility of sites like MetaVerse. At that time, the growth of these alternate locations was huge but still just a drop in the bucket in market size to Xstreet.

These alternate marketplaces had a better UI for customers, better services, and more feature for Merchants to present their products effectively to SL Residents. The critical problems that doomed these sites to ultimate not succeed are:

1) Unlike LL that can use its internal communication channels to directly communicate and promoted xstreet/MP, these 3rd party sites did not have this invaluable asset to talk directly to all SL residents. If you went to the secondlife.com web site, you would only see the LL xstreet marketplace – no competing sites. As such, it was like pissing into the ocean to get the general SL community to be aware of and use these other sites – even though at the time they could deliver as effective as LL could.

2) These sites are vulnerable to LL’s overnight changes in technologies and accesses to in-world operations. If LL screws up the API to allow delivery of products inside the grid, these sites are screwed – not LL. And now LL develops Direct Delivery that ONLY LL can use… not the other competitors. This is a HUGEEEEE risk for any business venture to take on when overnight LL can shut you down if they want.

It is really sad these sites could not survive. LL’s Commerce Team is one of the most poorly management and ineffective teams within LL. The Marketplace service is unstable, fragile, and only a shadow of what it could be if a competent team was leading it management and growth. But LL has no competition so basically…. they have taken a “This is what you get SL residents – if you don’t like it – too bad – then don’t use it.”

MarketPlace needs competition but in the LL controlled world of SL… that is impossible.

The hardest thing, as you point out, is for any alternative to SLMP to find a channel – or channels, or even a voice – which can generate a reasonable flow of consumers. As the initial boom with the likes of Metaverse and Slapt (both of which I was also a part) demonstrated, merchants were willing to make the move – but the volumes of customers just weren’t there. Which was a shame, because again, as you say, mush of what these alternative sites had to offer was streets ahead of SLX, and made things much easier for merchants and consumers alike.

Indeed not easy but possible. Second Life Community has in my opinion the most sozialized community at all. If many bigger people of the SL Blogosphere and merchants agree about a possible great alternative to SL marketplace, then you can hype up that thing pretty much and let it go viral. There are so many other channels like twitter, plurk, 2ndhub and so on and all the forums that there just need to be an alternative to SLM which people love and support.

There indeed has been alternatives but in my opinion not more worthwhile then xstreet or sl marketplace. that is the problem.

@miyodarcy Its not easy and as the 2009 – 2010 opportunity proved – its damn near impossible. So when you say “possible” … yeah anything is possible but so is it possible to swim across the atlantic ocean.

The reason is fundamental. As anyone that understands the economics of competing against a monopolistic player in your industry and especially one that also owns / controls the entire market and landscape that you want to penetrate, the odds are insurmountable for anyone competitor to LL’s Xstreet/MP to to be anything more than a fringe bit player in this market.

The best chance these sites had was 2009/10 when the LL Monopoly generated so much anger among the Merchants that a large number of us opened up our products on these sites. You mentioned that there is twitter, facebook, email, blogs, etc. now – but there was then too and we all used them. We had some big players open on these sites as well. All of us that moved over did all we could to promote these alternate sites – merchants put kiosks and banners at their inworld stores.

But, at the end of the day a critical mass of SL residents did not try it out. As good or bad as xstreet was in search and servicing customer shopping and providing quick delivery… Customers didnt even try it. I had my products set up on metaverse since January 2010, I have made 1 sale to date. I gave up this spring even having my magicbox rezzed.

The odds are simply stacked up to great in favor of LL’s Marketplace and the risks far to great against these competitors for them to succeed.

The 2009 backlash was the best chance these sites had while LL’s marketplace was at its weakest in merchant support.

BUT… if there was ever a chance for a powerful competitor to appear it would be if one showed up that could deliver MERCHANT CONTENT just as easily in SL and IW and AVANATION and OSGRID for a customer that participates in all grid. The logistics to set something like this up – i.e. differences in currency and cashout – but this would be the one advantage a competitor has over LL since Marketplace will never service another grid. BUT of course if LL saw too great a risk from one of these competitors it would simply draw up a new TOS rule and then ban the site from SL which is currently still the largest market among grids.

True yea.. some pretty great points. Maybe it is just my hope… I did btw. experience same with metaverse and slaptme. Getting Merchants who support the stuff in the boat, is still not the end of the mission.. you are right. You need other people (customers) visiting the site regulary as well. And true.. if there would be success, then LL would come up either with the TOS weapon or a buyout. I understand your both points. Maybe it´s just my hope as I do believe on the power of modern marketing. Marketing agains a monopol is another story, true.

@inara…. 🙂 Seems your blog post is watched pretty carefully by Rodvik because coincidentally the day after your blog posting… the Commerce Team posted a blog on the issue and ACTUALLY seems to have been forced to communicate to the Merchant community on the issue they have been BLOCK OPS on all this time.

I wouldn’t say sorted out but seems they were forced to communicate in one direction to the impacted merchants. It’s still a mess for those impacted. Chances are the commerce team will ram their heads back in the sand now that they feel they have spoken to their annoying customer base.

THIS IS A SCHEDULED EVENT Jun 10, 07:00 - 15:00 PDTJun 5, 15:17 PDTScheduled - We will be performing rolling restarts for regions on the RC Channels on Wednesday, June 10th beginning at 7:00 AM PST. Please refrain from rezzing no copy objects and remember to save all builds. Please check this blog for updates.

THIS IS A SCHEDULED EVENT Jun 9, 03:00 - 13:00 PDTJun 5, 15:13 PDTScheduled - We are performing rolling restarts for regions on the Second Life Main Channel on Tuesday, June 9th. Please refrain from rezzing no copy objects and remember to save all builds. Please check this blog for updates.

Flickr Photos

All other trademarks found within this blog are properties of their respective owners, and are duly acknowledged; no attempt to infringe on any such copyright or trademark is intended.

Unless expressly stated otherwise, no affiliation with, or sponsorship by, any platform or entity mentioned in these pages should be assumed.

Comments submitted to these pages represent the views and opinions of those authoring them, and do not constitute any endorsement on the part of the author of this blog.

Links to other web / internet locations are offered as a convenience only. No warranty, express or implied, nor any legal liability is assumed for the accuracy, completeness, or usefulness of any information, product, or service offered at or through such linked sites, or for any consequences arising from the use of such links.